"Seeking an increase in the minimum wage is laudable, but it is a decision that cannot be made absent consideration of its impact on the state's economy," Rell wrote in her veto message to Secretary of the State Susan Bysiewicz.
"As leaders, we have to be cautious about mandating additional costs to be borne by Connecticut employers and must always be cognizant of what is best for Connecticut, not only in the short term, but the long term," she said.
The legislation, passed largely along partly lines in the Democratic-controlled legislature, would have raised the hourly rate to $8 in 2009 and to $8.25 in 2010.
Of the approximately 65,000 state residents who earn minimum wage, about 47 percent are 24 years old and younger, according to the state Labor Department. Many work part-time in retail, sales, cashier and food service jobs.
Messages seeking comment were left Tuesday for state Senate President Pro Tem Donald Williams, D-Brooklyn, one of the bill's leading proponents; and the Connecticut Business and Industry Association, which opposed it.
Rell cited a report by Bysiewicz that 2,752 Connecticut businesses had closed in the first quarter of 2008. Many others are running on "razor-thin margins," Rell said, adding that an increase in the minimum wage could be the last straw for some.
At $7.65 per hour, Connecticut's rate is more than the federal minimum of $5.85 per hour and the nearby states of Rhode Island ($7.40), New York ($7.15), New Jersey ($7.15) and New Hampshire ($6.50). It is less than Massachusetts ($8) and Vermont ($7.68).
Rell on Tuesday also vetoed a related bill that would have increased the "tip credit" for businesses whose workers regularly receive gratuities, such as waiters and bartenders.
The tip credit lets hotels, restaurants and related businesses pay less than minimum wage to service employees as long as tips make up the difference. Without the minimum wage increase, the bill to increase the tip credit was unnecessary, Rell said.
